The price of HEXO Corp. (TSX: HEXO; NYSE: HEXO) plunged another 22% after shareholders learned that the company announced a $40 million offering. The stock was falling from its close of 69 cents to roughly 54 cents, down from its 52-week high of $8.40. The company said it expects to use the net proceeds from the Offering for working capital and other general corporate purposes.

Hexo said it would be filing a preliminary prospectus supplement to its amended and restated base shelf prospectus dated December 14, 2018, relating to a proposed underwritten public offering. In addition, the company said it intends to grant the underwriters a 30-day option to purchase up to an additional 15% of the Units offered in the proposed Offering on the same terms and conditions.

Canaccord Genuity Corp. and Canaccord Genuity LLC are acting as the lead underwriters for the Offering.

Hexo recently reported a staggering net loss of C$289 million for fiscal 2020 second-quarter ending January 31, 2020. The net revenue for Hexo increased by 17% to $17 million from $14.5 million in the first quarter. The earnings are reported in Canadian dollars.

The loss from operations for the quarter was $289.4 million, compared with a loss of $60.6M in the prior period. The company said that excluding non-cash write-downs and impairment charges in the quarter, the adjusted net loss was ($23.2M) compared with ($34.0M) in Q1’20. This was basically one of those kitchen sink quarters. The company just tossed everything but the kitchen sink into the loss column and just ripped the bandaid off.

While the quarter just seemed completely ugly, there was some slim good news for the company. The gross revenue increased 23% sequentially to $23.8 million.  Adult-use cannabis shipped revenue increased 21% sequentially to $24.4 million.

At the time of the earnings release Sebastien St-Louis, CEO, and co-founder of HEXO Corp said, “The industry continues to see challenges ahead, and following a strategic review of the Company’s core and non-core assets we believe we have positioned HEXO to meet these challenges head-on.”